Sodick Co., Ltd. Major Locations Worldwide Business Report April 1, 2014 to March 31, 2015 Domestic Sodick Website

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1 Major Locations Worldwide Sodick America Corporation (San Jose) Sodick, Inc. (Chicago/NJ/L.A.) (as of March 31, ) Shanghai Sodick Software Co., Ltd. Head office Miyazaki Plant Production sites Research and development sites Sales and service sites Head Office / Research and Technology Center Sodick Europe Ltd. (U.K.) Tokyo Showroom Sodick Deutschland GmbH (Germany) Sodick Singapore Pte., Ltd. Sodick (H.K.) Co., Ltd. Sodick Amoy Co., Ltd. Sodick (Taiwan) Co., Ltd. Suzhou Sodick Special Equipment Co., Ltd. Domestic Head Office Yokohama Branches Sendai, Omiya, Hachioji, Yokohama, Fukui, Matsumoto, Shizuoka, Nagoya, Osaka, Okayama, Fukuoka Production Sites Fukui Plant, Kaga Plant, Hakusan Plant, Miyazaki Plant Sodick Website Sodick Co., Ltd , Nakamachidai, Tsuzuki-ku, Yokohama, Kanagawa, Japan Phone: +81-(0) Facsimile: +81-(0) (Stock Code: 6143) TSE 1st Section, Code No Kaga Plant Fukui Plant Sodick (Thailand) Co., Ltd. Sodick Co., Ltd. We are looking forward to hearing from our shareholders. At Sodick, we are receptive to the opinions and questions of all our shareholders. If you have any questions, please feel free to contact us through the following web page: Business Report April 1, to March 31,

2 Message to Shareholders Sodick Corporate Highlights Create Your Future Yuji Kaneko President and Representative Director Linear motor drive metal 3D printer OPM250L one-process milling center honored at the 57th New Products Best 10 Awards sponsored by Nikkan Kogyo Shimbumsha The OPM250L metal 3D printer was awarded a Main Award at the 57th () New Products Best 10 Awards sponsored by the Nikkan Kogyo Shimbun. The prize was awarded for the highly regarded potential for spreading the implementation of metal 3D printing to production sites for plastic forming. Through the development of this system, a complete suite of technology is now available for end-to-end manufacturing processes capitalizing on Sodick s metal 3D printer that enables product groups to be built based on a consistent design process. Opening of the Sodick Tokyo Showroom Offers customers the experience of Sodick s one-stop solution based on metal 3D printing On January 15,, the Group opened its Tokyo showroom with easy access across from the Yaesu exit of the JR Tokyo Station. On display at the showroom are two installations of the OPM250L metal 3D printer together with the SL400G wire EDM machine and the GL30 V-Line system injection Dear Shareholders, then undergoes a repeated set of finishing processes at the Thanks to you, on March 31,, we were able to move our machining center, In this way, the system can produce tools stock listing on the Tokyo Stock Exchange from the Second and dies of complex shapes, such as 3D cooling water pipes, Section to the First Section. We would like to express our that could not be achieved with existing machinery until today. sincere gratitude to the support from our shareholders and Another Group strength is its new end-to-end manufacturing the many other concerned parties for making this change process ( monozukuri ), a one-stop solution from upstream possible. This accomplishment serves as a checkpoint in our to downstream that covers the full range of monozukuri from quest to maintain and improve the Sodick brand through CAD/CAM to EDM systems to a machine center and even strengthened corporate governance and by promoting a injection molding equipment. With this solution, the diversity business that will facilitate the generation of a wide manufacturer can respond promptly and effectively to variety of innovations that leverage the capability of our customer problems. We expect that an aggressive set of diverse talent base. While our business expands globally, we business activities will increasingly expand the contribution to aim to achieve a record high in net sales within three years metal 3D printing s business performance. through the fostering of the Sodick Group s own core In order to respond to your future expectations, we will competencies, centering on EDM. devote ourselves to the expansion of the Company s business One of our growth drivers for further business expansion is under the corporate philosophy of creation, execution, and our metal 3D printer that has been in the limelight for its next hard work and perseverance. To this end, we ask for your generation production technology the OPM250L. With this understanding and support. system, metallic powder is melted by laser and laminated, molding machine, allowing customers to have direct experience with our proposed one-stop solution. The showroom will not only serve as a place to exhibit our products, but will also be a location where we can offer customers sought-after solutions to their needs and hold various events and seminars on our latest technology. CONTENTS 1 Sodick Corporate Highlights 1 Results for 7 Message to Shareholders 2 Consolidated Financial Statements Global Network and Overview by Segment 3-4 (Summary) 8 Special Feature: Listing on Tokyo Stock Exchange, First Section Our path to date and future strategy 5-6 Share Information / Corporate Profile 9 Shareholder Notes 10 Dividends The Company conducts its business with utmost care for the Taking into account fundamental policies and financial results, critical capital contributed by its shareholders. Its basic policy the Company plans a total annual dividend of 20.0 per share, is to ensure that the necessary earnings are retained for future with a per-share year-end dividend of 13.0, consisting of an business expansion and for reinforcing a solid business structure ordinary dividend of 7.0 per share and a commemorative while continuing to pay a stable dividend. In accordance with this dividend of 6.0 per share to mark the Company s listing on the policy, the Company aims to pay income returns to shareholders First Section of the Tokyo Stock Exchange, together with a per- reflecting a dividend-on-equity ratio (DOE) of 2% or higher, share interim dividend of 7.0. For the next fiscal year, we plan based on a comprehensive judgment of financial results and to pay interim and year-end dividends of 9.0 each, for total cash flows in the applicable fiscal year. annual dividends of 18.0 per share. 2

3 Global Network and Overview by Segment Global Network Overview by Segment Machine Tool To support the Group s global manufacturing we will work to promote the globalization of development, production, and sales bases. Associated with accelerating globalization, overseas sales have been expanding. Specifically, Sodick Group has made advances not only in the industrialized nations such as Japan, U.S., and European countries, but also into emerging economies. In China, a region that typifies the emerging markets and which is becoming a leading industrial country, Sodick Group has been aggressively expanding its business since the start of the 1990s and achieved major results in line with the growth of the Chinese economy. As to the sales and service network in the region, Sodick Group s presence on greater China including Taiwan comprises sales and services bases in 26 locations. On the strength of this highly developed network, the Group is able to provide differentiated service that allows customers to use Sodick-made machinery with confidence. In the future, the Group will focus also on markets such as India, Southeast Asia, and Brazil, and in this way contribute to the art of manufacture throughout the world. Europe Machine Tool comprise mainly the manufacture, sales, and maintenance service of electric discharge machining tools and sales of consumables. In Japan, capital spending demand for machine tools has been recovering since the drop-off in spending following the increase in the consumption tax and is now rising due in part to government measures such as financial assistance to promote capital investment. Orders have been particularly strong in automobileand connector-related business. Overseas, in North America, demand has been brisk in the automotive, aerospace, and medical equipment sectors. In Europe, the worsening of the Russian economy has been a negative factor, but overall the automotive and aerospace sectors have remained healthy. In Asia, concerns have arisen about a slowdown in the growth rate, especially in China; nevertheless, healthy capital spending demand has been evident in the smartphoneand connector-related sectors. As a result of these developments, consolidated sales revenue at Machine Tool increased 5,947 million (+14.6%) compared with previous fiscal year to 46,783 million. 74.2% China Asia Japan North and South America Industrial Machinery In Industrial Machinery, domestic demand has remained steady for molding equipment used for high value-added components in the automobile- and smartphone-related sectors. However, profit margins have fallen as a result of high initial production costs and increased sales of low-cost equipment in Asia and other regions. As a result of these developments, consolidated sales revenue at Industrial Machinery fell 255 million (-3.0%) compared with previous fiscal year to 8,189 million. 13.0% Segments (changes starting in the 38th business term) Machine Tool Outline of business segments (business lines and main products, etc.) Development, production, and sales of electric discharge machining tools, machining centers, and metal 3D printers, etc. Food Processing Machinery Food Processing Machinery comprise the development and manufacture of various types of noodle manufacturing machinery and noodle manufacturing plants. In the major market of Japan, demand from convenience stores and supermarkets for improving the quality of noodles was evident, while overseas regions, especially China, saw demand spread as a result of the Japanese food boom for manufacturing equipment for long-life noodles that can be stored at room temperature. However, due to delivery delays on certain large projects that had been expected to complete within the fiscal year, Food Processing Machinery had consolidated net sales of 2,790 million, a drop of 21.1% or 747 million. Other 4.4% Industrial Machinery Food Processing Machinery Other Development, production, and sales of injection molding machinery, etc. Development, production, and sales of noodle manufacturing plants, noodle manufacturing machinery, and other food processing machinery Development, production, and sales of plastic molded products (formerly the High-Precision Mold and Die Machinery segment); development, manufacture, and sales of linear motor application products, ceramics products and associated control instruments, and LED lighting, etc. (formerly the Element Technology segment), leasing of electric discharge machining tools, etc. Ratios of domestic and overseas sales Overseas Japan 64.1% 35.9% 60.4% 39.6% Other consist of High-Precision Mold and Die Machinery (engaged in manufacturing services for precision connectors), Element Technology (engaged in products derived from inhouse technologies such as linear motors and ceramics materials, as well as the development, manufacturing, and sales of LED lighting fixtures), and lease operations for electric discharge machining tools, machining centers, and injection molding machinery, among others. During fiscal year, external sales continued to strengthen in linear motors and ceramic materials. Consolidated sales at Other increased 1,246 million (+30.5%) compared with previous fiscal year to 5,326 million. 8.4% 3 4

4 Special Listing on Tokyo Stock Exchange, First Section Feature Making use of our core advantages Our path to date and future strategy To grow existing and new business Since our founding as a company, Sodick has strived to contribute to monozukuri, around the world through such means as research in electric discharge control and development of numerical control (NC) equipment In the future, we will further our contribution to society through monozukuri, by enhancing our own technology and proceeding with applied development of new product groups Creation Founding 1988 February 1986 Listing on Second Section of Tokyo Stock Exchange Leap forward Overseas expansion Supporting customers monozukuri through a high volume of new technology development Expanding into Industrial Machinery Business expansion 1989 Expanding into Food Processing Machinery Towards an May 31, Listing on First even brighter Section of Tokyo Stock Exchange future 2007 PIKA-1 mirror surface finishing circuit VITOL high performance specialized EDM machining fluid Toshihiko Furukawa, Founder DDM noodle production machine NC EDM with 4-axis plus rotating main axis EDM development Leading the world in EDM through development of NC die-sinker EDM with system microcomputer No. 1 TR50S2 injection molding machine Moving forward on globalizing development, production and sales bases Innovation through linear motor technology High speed, precision, and responsiveness enabled by linear motor technology Metal 3D printer development Developing the metal 3D printer that creates the hopes and dreams for the monozukuri of the future Metal 3D printer OPM250L SMC (Sodick motor controller) controls high-speed, high-precision operations based on directives from an NC system A3C-R NC die-sinker EDM MD5B 5 Sodick builds a development, production and sales system that focuses on area-specific market objectives for the five world market regions of Japan, China, Asia (excluding China), North America, and Europe AG35L die-sinker EDM with linear motor drive Creating hopes and dreams for the monozukuri of the future 6

5 Results for Consolidated Financial Statements (Summary) (Units: million yen, rounded down) Overview During the fiscal year 31,, a drop-off was seen in the Japanese economy following the consumption tax hike, but it has now entered a mild recovery spurred by factors such as government economic policy. In the world economy, the U.S. kept up its steady performance boosted by factors such as an improving employment picture, while Europe s recovery was sluggish with performance varying by individual country as the impact of the situation between Russia and Ukraine persisted. In China, the economic outlook points to a slight slowdown in growth due to a frugality directive leading to a fall in consumer spending and other factors. In the machine tools industry, there has been a domestic recovery in corporations capital spending mindset, due in part to government financial assistance and other factors. Overseas, demand has been trending favorably in the automotive sector in North America and towards smartphone-related business in China. For the Sodick Group, this has meant movement towards steady demand in automotive- and connector-related business. In North America and Europe, the Group continues to bring in orders at a healthy pace in the automotive, aerospace, and medical equipment sectors while smartphone-generated orders have been strong in Greater China. Amidst this environment, the Group exhibited at international machine tools fairs, including the International Manufacturing Technology Show (IMTS) in Chicago in September and the 27th Japan International Machine Tool Fair (JIMTOF) in Tokyo in October, where we demonstrated a variety of products including EDM systems and engaged in proactive sales activity. At JIMTOF, we unveiled the OPM250L metal 3D printer, a technology that has been garnering attention in recent years. With this system, after metallic powder is melted with a laser and laminated, it undergoes a repeated set of finishing processes at the machining center. In this way, the system can produce molds and dies of complex shapes, such as 3D cooling water pipes, that could not be achieved with existing processing equipment until today. In addition, the Group is paving the way to a new end-to-end manufacturing process ( monozukuri ), in which the manufacturer can respond promptly and effectively to customer problems through a one-stop solution that covers the full range of processing from CAD/CAM to EDM systems to a machining center as Consolidated Financial Highlights (Units: million yen) well as injection molding equipment. In January, the company opened its Fukui Service Bureau where it performs contracted processing for customers. We have also opened our Tokyo Showroom, where customers can experience the latest monozukuri in the flesh made possible by using metal 3D printers. Based on these developments, consolidated sales rose 6,190 million (+10.9%) compared with previous fiscal year to 63,090 million. In earnings, operating income rose 2,240 million (+84.5%) compared with previous fiscal year to 4,891 million, ordinary income rose 1,761 million (+45.3%) compared with previous fiscal year to 5,647 million, and net income fell 644 million (-15.4%) compared with previous fiscal year to 3,550 million. Outlook for the Next In the Japanese economy, the Company expects that strength will be lacking in consumer spending but that the mild recovery will continue amidst an improving employment and income environment. In the world economy, we expect the mild recovery to continue. Although the U.S. economy faces challenges from the high dollar and falling oil prices, we also expect its recovery to continue amidst an improving employment and income. In Europe, we believe the recovery will continue at a measured pace, underpinned by export growth while the euro remains low. In China, we believe that fiscal and monetary policy will provide support to forestall an economic slowdown, but expect the economic path to convert from a high growth one to steady growth. In this economic situation, the machine tools market should continue in recovery mode in the major regions of America, Europe, and Asia, and firm up in the near future. In Japan as well, we expect steady capital spending to continue driven by renewed demand. For the fiscal year ending March 31, 2016, the Group business performance plan includes net sales of 69,000 million (+9.4% from the previous fiscal year), operating income of 5,100 million (+4.3% from the previous fiscal year), ordinary income of 4,700 million (-16.8% from the previous fiscal year), and net income attributable to parent company shareholders of 3,200 million (-9.9% from the previous fiscal year). *The above results forecasts are based on assumed average foreign exchange rates during the fiscal year of JPY119/USD1.0 and JPY134/ EUR1.0. Consolidated Balance Sheet Item Assets Period Current assets 64,557 71,362 Fixed assets 34,218 32,804 Tangible fixed assets 24,450 24,828 Intangible fixed assets 4,346 3,707 Investments and other assets 5,421 4,268 Total assets 98, ,167 Liabilities Current liabilities 29,779 34,537 Fixed liabilities 26,544 20,176 Total liabilities 56,324 54,713 Net assets Shareholders equity 38,673 41,462 Capital stock 20,775 20,775 Capital surplus 5,879 5,879 Retained earnings 13,714 16,503 Treasury stock (1,695) (1,696) Accumulated other comprehensive income 3,714 7,923 Minority interests Total net assets 42,451 49,453 Consolidated Statement of Income and Comprehensive Income Item Period Net sales 56,899 63,090 Gross profit 16,667 20,874 Operating income 2,651 4,891 Ordinary income 3,886 5,647 Income before income taxes 3,857 5,129 Net income 4,194 3,550 Comprehensive income 7,541 7,763 Consolidated Statement of Cash Flows Item Cash flow from operating activities Cash flow from investing activities Cash flow from financing activities Effect of exchange rate changes on cash and cash equivalents Period Net increase (decrease) in cash and cash equivalents Cash and cash equivalents, beginning of year Increase in cash and cash equivalents from newly consolidated or merger of subsidiaries Increase in cash and cash equivalents resulting from merger with non-consolidated subsidiaries Decrease in cash and cash equivalents resulting from exclusion of subsidiaries from consolidation 5,577 8,298 (4,181) (144) (3,696) (5,243) (2,293) 3,748 25,514 23, (0) 80,000 60,000 40,000 56,899 63,090 Net Sales Ordinary Income Net Income 69,000 (forecast) 8,000 6,000 4,000 3,886 5,647 4,700 (forecast) 8,000 6,000 4,000 4,194 3,550 3,200 (forecast) Total liabilities and net assets 98, ,167 Cash and cash equivalents, end of year 23,647 27,396 20,000 2,000 2,000 0 ending March ending March ending March

6 Share Information / Corporate Profile (as of March 31, ) Shareholder Notes Share Information Total number of authorized shares 150,000,000 Total number of shares issued 53,432,510 Total number of shareholders 21,598 Major Shareholders Name of shareholders Corporate Profile Company name: Address (Head office): No. of shares (shares) Share of ownership (percent) Sodick Co., Ltd. 3,114, Japan Trustee Services Bank, Ltd. (trust account) 1,271, Toshihiko Furukawa 1,195, TF Co., Ltd. 1,150, The Master Trust Bank of Japan, Ltd. (trust account) 1,122, Japan Securities Finance Co., Ltd. 1,086, Sodick Business Partner Stock Ownership Association 977, SBI Securities Co., Ltd. 904, Sumitomo Mitsui Banking Corporation 850, Masaaki Suzuki 742, Sodick Co., Ltd , Nakamachidai, Tsuzuki-ku, Yokohama, Kanagawa, Japan Phone: +81-(0) (representative) Established: August 3, 1976 Capital: 20,775,756,958 yen Representative: Yuji Kaneko Employees: 622 (3,183 consolidated) Consolidated subsidiaries: 22 Main products: Die-sinking EDM / Wire-cut EDM / Small hole-drilling EDM / Specialist EDMs and special purpose models (pallet changers, robots, etc.) / Numerical control / Specialist tools for EDMs / Metal 3D printers / High speed milling machining center / Nano processing machine / Integrated production systems / Precision injection molding machines / Industrial ceramics / Linear motor for industrial machinery / Other electronic processing equipment / Electrode wire used for wire-cut electric discharge machining tools / Precision dies and molds / Electronics parts and modules / Various software / Food machinery / LED application products / Commissioned research / Others Share Distribution by Holder Treasury stock 5.83% Securities companies 5.36% Other corporations 6.10% Foreign corporations 9.16% Private and other 61.04% Financial institution 12.52% Distribution by Number of Shares Held 1000 or more 46.00% 100 or more 21.05% List of Directors (as of June 26, ) Chairman and Representative Director President and Representative Director Vice President and Representative Director Executive Managing Director Executive Managing Director Executive Managing Director Outside Director Outside Director Full-time Audit & Supervisory Board Full-time Audit & Supervisory Board Outside Audit & Supervisory Board Outside Audit & Supervisory Board Outside Audit & Supervisory Board Below % 10 or more 25.54% Toshihiko Furukawa Yuji Kaneko Kenichi Furukawa Keisuke Takagi Takashi Matsui Misao Fujikawa Sadao Sano Kenichi Osako Hirofumi Maejima Hideki Tsukamoto Kenichi Tsugami* Toshiaki Kurihara* Akio Hosaka Yuichi Watanuki Takashi Nagashima* Kazuto Shimoyama Tomio Okuyama * Independent officer as determined by the Tokyo Stock Exchange. Shareholder Notes Fiscal year Dividend at end of fiscal year Dividend at end of 2nd quarter Annual shareholder s meeting Administrator of the shareholder register Administrator s contact April 1 to March 31 of the following year March 31 September 30 June Mizuho Trust & Banking Co., Ltd. Mizuho Trust & Banking Co., Ltd., Stock Transfer Agency Department Izumi, Suginami-ku, Tokyo , Japan Phone: (Toll free in Japan) Account management institution for special Mitsubishi UFJ Trust and Banking Corporation accounts Stock listing Tokyo Stock Exchange, First Section Stock code 6143 Notification shall be given electronically. Public notices shall be released on Public notice the following URL: * However, in the event of an accident or other unavoidable circumstances where electronic public notification is not possible, public notices shall be published in the Nihon Keizai Shimbun. [Notice] 1. Accompanying the conversion to an electronic certificate system, change of address, purchase applications and other such procedures requested by a shareholder are now principally handled by the account management institution (securities company, etc.) where the shareholder has opened an account. Please inquire at the securities company or other institution where you have your account. Also, please note that the administrator of the shareholder register (Mizuho Trust & Banking Co., Ltd.) does not offer such services. 2. For information on the various procedures concerning shares recorded in a special account, please contact the following office at Mitsubishi UFJ Trust and Banking Corporation, Sodick s administration institution for special accounts. 3. Unclaimed dividend distributions are payable at the head offices and branch offices of Mizuho Trust & Banking Co., Ltd., Mizuho Bank, Ltd., and Mizuho Securities Co., Ltd. [Procedures pertaining to shares of stock] Stock shares registered in accounts at securities companies, etc. Description of procedure, inquiry, etc. Inquiries related to sending and return of mail Inquiries related to distribution after payment period expiration General inquiries concerning share administration Address, name and other such changes Designations of method for receipt of dividends Procedures, inquiries, etc. other than those listed above Stock shares registered in special accounts Description of procedure, inquiry, etc. Requests for transfers from special account to ordinary account Purchase requests for odd-lot transactions Address, name and other such changes Special account balance inquiries Designations of method for receipt of dividends* Inquiries related to sending and return of mail Inquiries related to distribution after payment period expiration General inquiries concerning share administration Administrator of the shareholder register Where to inquire Regulations for the purchase of supplemental shares or sales of shares in case of odd lot shares Since odd lot shares are not tradable in securities markets (the unit size is 100 shares), shareholders whose holdings include odd lot shares can use either of the following alternative regulations. 1. Regulation for the purchase of supplemental shares Shareholders are able to acquire from the Company the shares missing from a full unit. 2. Regulation for the sale of odd lot shares Shareholders are able to sell their odd lot shares to the Company. Mizuho Trust & Banking Co., Ltd., Stock Transfer Agency Department Izumi, Suginami-ku, Tokyo , Japan Phone: (Toll free in Japan) Please inquire at the securities company or other such institutions where you have opened your account. Account management institution for special accounts Administrator of the shareholder register Where to inquire Mitsubishi UFJ Trust and Banking Corporation, Stock Transfer Agency Department Higashisuna, Koto-ku, Tokyo , Japan Phone: (Toll free in Japan) [Methods for requesting procedure forms] Request made through automated telephone service: (Toll free in Japan) Online downloads: Mizuho Trust & Banking Co., Ltd., Stock Transfer Agency Department Izumi, Suginami-ku, Tokyo , Japan Phone: (Toll free in Japan) *Shareholders owning shares of stock registered under a special account may not select pro rata distribution according to the number of shares as the method for receiving dividend distributions. 9 10